Dan Kurzrock was a freshman at UCLA when he started brewing beer in his frat-house kitchen. The process posed a moral dilemma for the 19-year old that had nothing to do with being under the legal drinking age.

To his dismay, Kurzrock, an economics major with a keen interest in sustainability, was generating 15-20 pounds of grain waste each time he made a batch of beer.

“I was just blown away to see how much raw material we used to make five gallons of beer," recalls the now 26-year-old entrepreneur. "I had this moment of 'there has got to be a better way to do this.' I literally felt like I was dumping out these tubs of oatmeal."

By his junior year, Kurzrock and his longtime buddy Jordan Schwartz, also a student at UCLA, had started baking and selling bread made from spent beer grains, which still had a lot of fiber and protein. They worked out of Schwartz's apartment and sold about 20 loaves a week to people on campus, earning enough profit to finance their hobby.

"We found they were fascinated by the story, not that it was just fresh-baked bread but that the main ingredient was the waste product from pretty much everyone’s favorite beverage," says Kurzrock.

The two friends officially launched their business, called ReGrained, in 2012, right after graduating a semester early from college. They switched from baking baking bread to granola bars, thousands of them a month. Bread was too labor intensive, Kurzrock explains. "We wanted a product we could scale."

ReGrained is telling a compelling environmental story, at a time when the food industry is grappling with a mountain of food waste. All of the grains used in their bars come from craft breweries in the city, and their other baking ingredients, such as almonds and puffed quinoa, are sourced from environmentally responsible producers, some of them organic.

In London, in another twist on the beer-grain story, Toast Ale makes beer from the heels of bread loaves that sandwich makers normally discard. (The two companies like to tweet back and forth at each other, says Kurzrock.)

ReGrained's Honey Almond IPA Bar is made with spent grain from the beer brewing process. Photo by Marc Atkinson/Jesse Rogala.

In agricultural regions, breweries can more easily sell the grain residue to farmers for animal feed or compost. Disposal is more problematic for small urban craft breweries. In some cities, the leftover grains go right into landfills. In ReGrained's case, they're finding that breweries are more than happy to let them haul away the grain residues, for free.

One of their suppliers is 21st Amendment, a brew pub and microbrewery in downtown San Francisco. Cofounder and brew master Shaun O'Sullivan says each brew generates over 5,000 pounds of grain -- much more than tiny Regrained can handle. Most of their grain waste goes to a rancher in the Central Valley to feed his livestock.

"As ReGrained's capacity grows, we're looking forward to sending more their way," O'Sullivan tells me by email. "Their bars are delicious and it's a great repurpose of what would normally be a discarded material."

In December, the cofounders raised $30,670 on
Barnraiser, a
crowdfunding community for food entrepreneurs and farmers. They used the cash to develop a "2.0 version" of their almond IPA bar and Chocolate Coffee Stout bar. I particularly liked the stout bar, which had a sophisticated, not-too-sweet flavor. (You do need to chew them well. )

Chocolate Coffee stout bar is a granola bar made with the grainleft over from beer making. Photo by Marc Atkinson/Jesse Rogala

What the cofounders have going for them besides an earnest mission and a product that tastes good is a really catchy slogan. "Eat Beer" appears on their packaging, promotional material and T-shirts.

Until the crowdfunding campaign, the business was entirely bootstrapped with the cofounders' personal savings. At first, they worked out of a home-based kitchen that was certified as a cottage business under California law. In late 2014, they moved into a commercial kitchen space and spent about a year targeting smaller retail accounts where they could get a lot of feedback on the product. They also sold their bars online and at events.

"Along the way, we figured out a bunch of things," says "Executive Grain Officer" Kurzrock, who is earning his MBA in sustainable management at Presidio Graduate School in San Francisco.

Their first big recipe improvement came from removing eggs and replacing it with other emulsifiers. They were concerned about sourcing their eggs ethically and sustainably, and they also wanted to bring down the product's cost, Kurzrock says. Their new formulations also improved on the texture, making the bars less crumbly, and reducing the sugar content and calories. (A 1.16-ounce Stout bar has 140 calories, 3 grams of protein, 6 grams of sugar and 3 grams of fiber.)

The money from the crowdfunding campaign also gave them the working capital to order new compostable packaging. Later this year, they plan to release a cookie mix made with beer grains (It was one of the rewards in their crowdfunding campaign.) Other baked goods and new bar flavors are in the works too.

"We're ready to expand and grow," says Kurzrock. "It's going great, but we still don't have the new recipe on the shelves anywhere yet. We're waiting for the new packaging."

Eventually, they hope to scale the business to the point where they're making a significant dent in the craft-brew industry's beer-waste problem. Repurposing spent grain was a commendable idea, but, says Kurzrock, that wasn't enough.

"Now we've taken it to a great product reinforced by a great idea."

I'm currently an assistant managing editor/health care editor at Crain's New York Business with past stints at Bloomberg News, BusinessWeek, NY Newsday and other publications. I'm a prize-winning business journalist and educator with a keen interest in entrepreneurship, sust...